Policy Language in an Individual Policy can be Interpreted Using ERISA Precedent

In a recent case, Florida Tube Corporation v. MetLife Insurance Company of Connecticut, No. 14-10824, 2015 WL 1189210 (11th Cir. Mar. 17, 2015), the Eleventh Circuit determined that the “due proof” language in an individual life insurance policy, which required proof of death “satisfactory” to MetLife, could be interpreted using the same principles of interpretation as those used in a similar ERISA-governed policy. This holding could assist both insurance companies and courts in interpreting policy provisions contained in non-ERISA policies that are similar to those contained in ERISA plans.

The plaintiffs in this case were two corporations that were the beneficiaries of a life insurance policy insuring the life of their president, Antonio Fernandez.  The companies both filed for bankruptcy in the early 2000s and Fernandez and his wife filed for bankruptcy in 2004.  Allegedly, Fernandez took off in his own plane from an airport in the Dominican Republic on August 18, 2008 en route to Puerto Rico and never made it. His assistant had dropped him off at the airport and conveniently “remembered” that he heard Fernandez mention some concerns about electrical or battery problems with the plane and he claimed he saw Fernandez board the plane alone.

No wreckage or a body was ever found but a representative of the beneficiaries contacted MetLife, which provided them with claim forms and requested that they provide a copy of Fernandez’s death certificate. MetLife was provided with a death certificate from the Dominican Republic’s Central Electoral Board (“CEB”), which listed the date of death as August 13th, not the 18th.  Eventually, the CEB issued a certificate with the correct date but the CEB formed a commission to investigate the authenticity of the second certificate and in September 2009 instructed government agencies to refrain from using the certificate because it was “full of irregularities” and declared it null and void.

MetLife also conducted an investigation and learned that the death proceeds formed an “indispensable” part of the Fernandezes’ bankruptcy reorganization plan and MetLife was unable to find any evidence regarding Fernandez’s status or location. After it informed the beneficiaries of its findings and continued lack of sufficient proof of death, their attorney sent an NTSB report to MetLife, which had been based solely on information released to it by the Dominican government and which neither named Fernandez nor made any conclusion beyond presuming that the pilot was dead and the aircraft had been destroyed. The attorney claimed that it was sufficient proof of death.  MetLife rejected the NTSB report as not “sufficient” proof of Fernandez’s death and refused to pay the death claim. In a shocking development, the beneficiaries sued.

The district court granted summary judgment to MetLife based on the policy’s requirement that a beneficiary had to give MetLife due proof of death, which was defined in the policy as a copy of a certified death certificate, a copy of certified death decree from a court, a written statement of an attending physician “or any other proof satisfactory to us.” Since the beneficiaries could not produce any of the first three, the court was left to construe the “proof satisfactory to us” provision. In doing so, it applied precedent set forth in Tippett v. Reliance Standard Life Insurance Co., 457 F.3d 1227 (11th Cir. 2006), an ERISA matter in which the court had held that the phrase “satisfactory . . . to us” vested a plan administrator with discretion to determine whether the information provided was sufficient. Despite the beneficiaries’ arguments that an ERISA case should not be used to review MetLife’s interpretation, the court stated that nothing in Tippitt’s holding limited its use to ERISA cases and noted that “the incentive for proof provisions in insurance policies is the same whether or not ERISA is involved.” Based on that interpretation, the court affirmed the district court and held that plaintiffs had not provided “due proof” of death, as required by the policy.

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